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Continental Airlines: Outsourcing IT to Support Business Transformation

Prepared by Neils Christensen and Keri Pearlson

As the Texas sun began to set, Janet Wejman, the Chief Information Officer for Continental Airlines looked out the window of her Houston-based office and considered what her next move should be. It was now November 1996 and while she had only been with the company for a few months, she faced a dilemma relating to the airline’s information technology outsourcing agreement with Electronic Data Systems (EDS). The ten-year contract was beginning to show some strains as a result of the dramatic changes that had taken place at Continental since the contract’s inception. Tensions had developed between some of the:
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The change in management had direct implications for the outsourcing relationship. Dennis Stolkey, a Division Vice President with EDS’ Travel and Transportation Group (and the former account manager, for Continental), indicated that the outsourcing relationship between EDS and Continental had evolved through several stages. He recalled:

Continental was the Travel and Transportation Group’s largest customer and we treasured our partnership with them. I believe the relationship grew stronger after the initial signing, but especially during the 1993 and 1994 (CALite) years where strategic relationships were developed with Continental senior management. With the emergence of an entirely new and successful management team in 1995, we found ourselves trying to build new relationships and prove EDS again under the new circumstances.

Bill Miller, Senior Director - Telecommunications & Technology, who joined Continental in 1984 during its first bout with bankruptcy noted:

One of the most challenging aspects of this agreement was perpetuating the intentions, underlying assumptions, and strategic objectives of the original contract. In the five years after it was signed, only one person from Continental who sat at the negotiating table remained with the airline and only two senior managers who lived through the outsourcing process were still here. With each generation of new people there is not
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